Tips to Save Money on Your Student Loans

The following is a post from staff writer Crystal at Budgeting in the Fun Stuff, where she writes about finding the balance between paying your bills, saving for your future, and budgeting for the fun stuff along the way.

Student loans are a convenient way of financing a college education. They can also be very expensive. I am sure the thought of an entry level salary for the college graduate saddled with high monthly student loan payments can be bittersweet. However, there are some ways to minimize the amount of student loans needed to make it through any degree.

Start Saving Early

Parents could begin planning for their children’s college education in advance. Considering the constant increase in tuition, it’s extremely helpful if parents start their child’s college savings plan about the same time as they plan their baby shower. A new family may not have a ton of extra cash, but they could save money by giving up expensive habits or cutting other regular costs. Any cash gifts to the child can be squirreled away to help as well.

I don’t personally think it’s a parents’ responsibility to help, but it is so nice when it happens.

Get a Scholarship

Scholarships are the most inexpensive and convenient way to avoid college loans. However, the scholarship market is competitive. A child can pretty easily finance most of their education by learning how to fill out scholarship applications like a pro.

Keep in mind that the poor people reviewing these applications have probably seen the same old stuff a thousand times, so try to be unique but not crazy. Try to put emotion into your personal stories. For the academic scholarships, take the tests like ACT and SAT until you are at least in the top 10% if you want a shot at thousands.

I personally paid for 60% of my 4 year degree through 3 main scholarships, one was for academic achievements and the other two were simply because I applied and impressed the reviewers with creative writing.

Attend State Schools

There are many benefits to students who attend schools in their state of residency. Generally tuition costs are lower because your parents pay taxes in that state. This could save you as much as $2,000 dollars per semester. This could lower your need for student loans by $4,000 dollars a year and $16,000 over the course of your undergraduate studies!

I attended the state school that offered me the biggest scholarship and ended up saving more than $15,000 compared to my second choice. Public universities are also cheaper than private universities, so you should keep that in mind too.

Load Up On Grants

Pell grants and other federal grants are given away by the federal government to help students just like you. It would be really smart to apply for this free money. The application should be filled out in full and all required documentation should be attached correctly the first time. Do not leave any excuse for rejection.

Get a Job

My part-time jobs throughout college saved me thousands of dollars in student loans. Some jobs even allow a little time for studying. I was able to find dead periods while being a tax office receptionist that allowed me to catch up on tons of reading. I wrote a few of my best papers while working the on campus bowling alley counter on dead week nights.

Some employers even offer tuition reimbursement for their students. Since it costs an employer so much money to train a replacement, many businesses are willing to work with you as you attend school. In addition, the skills that you earn while returning to school could benefit the organization in the future.

By earning your degree through an online university, you will not have to miss any time at work and can complete your education in your spare time. While not all employers will go for this type of arrangement, it is worth proposing the idea.

No matter which way you cut it, student loans stink. Using the methods above may help you need less of them or maybe none at all.

Readers, What tricks have you come across to reduce the need for student loans?

8 Responses to Tips to Save Money on Your Student Loans

@krantcents, I went to a state school and it was way more expensive that community college. That being said, you do miss out on some social aspects that large schools have. College isn’t only about learning in classes.

I went to community college for two years and saved a ton of money. Then, when I transferred to a state school, I was lucky enough to have my parents pay for it, but that was because the tuition was low and I had already completed half of my course work. I also worked part-time to cover all of my other expense minus tuition. Now I’m back in college and making grants and scholarships work for me as much as possible. One additional tip I’d add is that if you do take on student loans, try paying a small amount each month so that at the end the interest hasn’t ballooned up.

You gave some great advice for families looking to cut the cost of college. Going to school out of state can add $10,000 – $15,000 to tuition costs each year; ending up costing a family $40,000 – 60,000 over a 4 year education. I can’t emphasize enough, the importance of attending a state school in your home state.

Also applying for financial aid is important. That way if you qualify for grants, you will be awarded them in your financial aid package. Some grants are awarded on a first-come, first served basis so if you fill the forms out improperly, you may miss out on needed money for college.

Community college is a great option, or a regional campus of a state university. Be sure that you check that all credits will transfer to your target school BEFORE you start, or you will be wasting both time and money.

Another tip is to graduate on time! That means, start school by spending time with your adviser to put together a four year plan to complete all required courses. Then work hard to get ahead of that plan in case the classes aren’t offered when you need them, or you drop a course, or get ill, or just have a lousy prof. AP courses and college credit courses in high school are a great way to get ahead of your plan.